4 Bullish Stocks Under $4

All 4 of these trades should play out in the intermediate term

Some traders mistakenly think that technical analysis and penny stocks are an ill-fated combination…but that’s not always true. Using technical analysis on penny stocks is not a foolproof method because of the low liquidity often associated with penny stocks, so here are a few bullish ideas from the Trending123 Pattern Scan powered by Recognia to get your research started. All have volume over 200,000.

Bullish Symmetrical Continuation Triangle

Click to Enlarge BSD Medical Corp. (BSDM) has developed a symmetrical continuation triangle over the past 16 days.

The price has broken upward out of a consolidation period, suggesting a continuation of the prior uptrend. A symmetrical continuation triangle pattern typically shows two converging trendlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks out above the upper trendline with a noticeable increase in volume, confirming the pattern as a continuation of the prior uptrend.

This pattern is confirmed upon that final increase in volume.

Volume: 757,994

Target Price: $1.71 – $1.75

Stop: $0.92

Diamond Bottom

Click to Enlarge Uroplasty Inc. (UPI) has developed a diamond bottom pattern over the past 132 days, making this a long-term pattern that should take about as long to play out.

The price seems to have reached a bottom, showing signs of reversal as it has broken upward after a period of uncertainty or consolidation. The diamond bottom pattern begins during a downtrend as prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. When the price breaks upward out of the diamonds boundary lines, it marks a significant reversal to a new uptrend.

Volume: 232,551

Target Price: $3.60 – $3.90

Stop: $1.70

Bottom Triangle

Click to Enlarge Save the World Air (ZERO) has shown a bottom triangle pattern developing over the past 65 days.

The price seems to have reached a bottom, showing signs of reversal as it has broken upward after a period of uncertainty or consolidation. A bottom triangle shows two converging trendlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks above the upper trendline with a noticeable increase in volume, confirming this bullish pattern as a reversal of the prior downtrend.

Volume: 1,161,309

Target Price: $2.10 – $2.25

Stop: $0.99

Megaphone Bottom

This rare formation can be recognized by the successively higher highs and lower lows, which form after a downward move. Usually, two higher highs between three lower lows form the pattern, which is completed when prices break above the second higher high and do not fall below it.

The pattern is completed when, usually on the third upswing within the pattern, prices break above the prior high but fail to fall below this level again.

The recent broadening action tells us that trading has been out of control, but a breakout on the upside suggests we’re starting a more decisive uptrend.

Volume: 640,678

Target Price: $1.86 – $1.94

Stop: $1.29

InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in hisday trading, options and trading services: Power Trading at the Open, Parabolic Options and Trending123. Trending123 members receive access to the Trending123 Pattern Scan powered by Recognia free as part of their membership.

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